Sasseur REIT Delivers Robust Q3 2025 Results: Double-Digit Sales Growth, Lower Debt Costs, and Resilient Outlook

Key Highlights for Q3 and 9M 2025

• Strong Outlet Sales Growth:
  • Q3 2025 total outlet sales surged by 10.8% YoY to RMB 1,062.3 million, with YTD (9M) sales up 3.9% YoY to RMB 3,244.7 million.
  • Chongqing Liangjiang (+16.6% YoY) and Bishan (+15.3% YoY) outlets led growth, driven by successful anniversary campaigns and positive momentum at Kunming. Hefei’s sales decline moderated, with September sales turning positive YoY after strategic reconfigurations.
• EMA Rental Income Growth:
  • Q3 2025 EMA rental income rose 4.9% YoY in RMB terms to RMB 166.3 million, and 9M 2025 income grew 3.1% YoY to RMB 502.5 million.
  • Variable component of EMA rental income increased 9.7% YoY in Q3, reflecting the robust sales performance.
  • In SGD terms, Q3 EMA rental income up 2.6% YoY to S\$30.0 million, while 9M income declined 0.3% YoY to S\$91.3 million, primarily due to RMB depreciation.
• Portfolio Occupancy and Lease Expiry:
  • Portfolio occupancy remains high at 98.5% in Q3 2025.
  • Weighted average lease expiry (WALE) stands at 2.0 years (NLA) and 1.2 years (Gross Revenue).
  • Proportion of leases expiring in 2025 has dropped significantly (from 42.2% to 8.9% by NLA; 55.8% to 4.3% by GR), indicating that 2025 renewals are largely secured and reducing near-term leasing risk.
• Prudent Capital Management:
  • Aggregate leverage remains low at 25.5%, well below the MAS cap of 50% and offering significant debt headroom for expansion.
  • Weighted average cost of debt improved to 4.6% (down 0.7% from Dec 2024), supported by a fully RMB-denominated loan structure and stable interest rates.
  • Debt maturity profile extended to 4.5 years, with no refinancing needs until 2028.
  • Interest coverage ratio healthy at 4.5x.
  • Maiden Green Loan of 10-year RMB 308m secured at competitive rates for onshore refinancing.
• Portfolio Diversification and Tenant Mix:
  • No single tenant accounts for more than 5% of gross revenue; top 10 tenants contribute only 16%.
  • Trade mix remains broad-based across domestic fashion (over 40%), sports (20–34%), international brands (8–18%), F&B, and others.
• Active Asset Management and Strategic Initiatives:
  • Strategic reconfiguration at Hefei Outlet (conversion of underperforming entertainment zone to sports retail, and rooftop enhancement) already yielding higher footfall and ticket sales.
  • Continued expansion of VIP membership base, reaching 4.65 million as of 30 Sept 2025 (CAGR of 18.7% since 2020), with VIPs contributing over 60% of sales.
  • Robust marketing calendar with signature events such as Anniversary Sales, driving record sales and high engagement.
• Strategic Growth Pipeline:
  • Right of First Refusal (ROFR) on Sponsor’s Xi’an and Guiyang outlets provides visible pipeline for accretive acquisitions.
  • Sponsor remains highly supportive, with ~56% stake in Sasseur REIT and a proven track record in outlet mall management.

Market and Macro Environment

• China’s GDP growth for Q3 2025 was 4.8% YoY, with retail sales up 3.0% YoY in September amid cautious consumer sentiment due to a prolonged property downturn.
• Consumer Confidence Index improved to 89.6 in September 2025, reflecting gradual recovery in sentiment.
• The upcoming 15th Five-Year Plan (2026–2030) emphasizes boosting household consumption and supporting income growth, which bodes well for retail and outlet operators.

Price-Sensitive and Shareholder-Relevant Points

• Double-digit sales and rental income growth in Q3, coupled with prudent balance sheet management and no refinancing needs until 2028, position Sasseur REIT as a resilient and attractive yield/income play.
• The lowering of average debt cost by 0.7% and extension of debt maturity significantly reduce refinancing and interest rate risks, which is positive for DPU (distribution per unit) stability and growth.
• Secured pipeline of accretive acquisitions (Xi’an and Guiyang) and strong sponsor alignment suggest potential for future NAV and DPU growth, which can be price-accretive for unitholders.
• High occupancy, diversified trade mix, and proactive reconfiguration strategies reduce operational risks and support revenue resilience, especially amid macro uncertainties in China.
• RMB depreciation remains a headwind for SGD-reported results, but natural hedging via RMB-denominated loans mitigates FX risk.

Looking Forward

• Management will continue to prioritize proactive asset management (including AEIs and tenant mix optimization), prudent capital management, and accretive acquisitions to drive sustainable returns.
• Strong branding, VIP loyalty programs, and immersive event strategies are expected to fuel further sales and footfall growth.
• Ongoing government emphasis on household consumption and supportive policies is a positive long-term driver for the retail outlet sector in China.

Conclusion

Sasseur REIT’s Q3 2025 results demonstrate robust operational performance, strong capital discipline, and a visible growth pipeline, positioning it as one of the more resilient and growth-oriented China retail REITs listed in Singapore. The combination of high occupancy, low gearing, secured lease renewals, and potential accretive acquisitions make the REIT attractive for both income and growth investors, although currency risk remains a lingering factor. Shareholders should watch for acquisition developments, continued sales momentum, and any changes to China’s consumption policy as potential share price catalysts.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, an offer, or solicitation to buy or sell any securities. Investors should conduct their own due diligence and consult their financial advisors before making any investment decisions. Past performance is not indicative of future results. Sasseur REIT’s performance may be affected by risks including, but not limited to, changes in market conditions, interest rates, currency exchange rates, and property valuations.

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